Blog: Challenging the ‘status quo’ in Open Finance

28 Feb 2020

Stuffy rooms with elongated lectures and lukewarm coffee are the typical expectations one could have of a conference or exhibition, but that was certainly not the case for the recent Open Finance Hackathon put together by ATB Financial.

The fact it was labelled a ‘hackathon’ should have been the first clue. This event was to be like no other, and Royal Mount University in Calgary didn’t disappoint. Even the grounds sparkled with fresh snow!

Pitch perfect

With passion and energy come great ideas, and this was evident from the off when the teams entered the first stage of the judging process – ‘the pitch’.

From concepts that better serve global substantiality efforts, to platforms to help Canadians make better use of the P2P lending market with fairer lending scenarios, it was clear we were in for a tough days’ judging.

There was even a platform that would eventually guide, and impact, consumers’ buying criteria depending on the size of their carbon footprint and that of the selling company.

Each pitch, as unique and interesting as they were, had one glaring feature in common – the teams researched their concepts really well to identify a need and to solve a problem. They also thought long and hard about the delivery and ultimately, the business viability.

Value narrative

In an ever-changing financial landscape where all banks, not just incumbents, are under threat to deliver continued value, and with new digital challengers and fintechs wanting an ever-increasing larger slice of the pie, this is creating a seismic shift in every way.

How and where we bank, why we do it in the ways we do and how we make and receive payments are all under the spotlight.

Open Banking was brought about to drive innovation, create competition, put the data back into the hands of the consumer and, in effect, to challenge the ‘status quo’.

So, my question is: ‘Isn’t that meant to be of the benefit of the consumer?’ and why, then, do we see commercial benefit at the top of many agendas?

As an industry, it is vital we adopt a different mindset to foster a global community that drives innovation so that ultimately, we can deliver better products, services and experiences to businesses and customers alike.

Do something meaningful

We’ve already seen some superb services come to market to crack this nut, however, rather than asking how this will impact our bottom line or just responding to keep up with the rest of the market, the industry must focus more on whether enough has been done to create impactful services to provide value to broader customer sets.

Do we need to work harder to bring about real change when it comes to financial education and helping our future selves make better and more information financial decisions, for example?

The eventual winner of the aforementioned hackathon, walking away with CAD $10,000, solved a clear problem when it came to those working in the gig economy and keeping their finances in order. Not only did they have the best pitch, ultimately it was the best proposition that could enter the market tomorrow.

Canada is in the early stages of adopting Open Banking, or ‘Consumer Directed Banking’ as its government labelled it in a recent media announcement.

The country, rightly or wrongly, sat back to take stock after initial consultations, waiting to see how other regions were building new Open Banking ecosystems. This was an extremely wise move.

There have been cries from all corners of the market to implement Open Banking sooner in the region, but, by taking some time out, Canada now has the ability to build something really special and engrain the customer in the building blocks of their new banking ecosystem.

Rome wasn’t built in a day and with the second Open Banking consultation around the corner it begs the question as to whether Canada has played an ace card that will enable them to put customers first and consider the bottom line second.

What is clear, is that with a roadmap, data security and implementation high on the agenda of the second consultation, Canada’s approach may well ‘challenge the status quo’.

  • Adam Cox is the co-founder and director of Open Banking Expo